September 23rd, 2020
EPISODE 2: Performance Management Lives in a VUCA World
[00:00:04] GB: Something is happening in performance management and it might be just in time. Amidst the fog of uncertainty that seems to envelop the world today, organizations are beginning to figure out where they stand and more importantly, where they go from here.
When it comes to performance management, they’re innovating on how they evaluate and develop talent. When goals set last quarter, let alone last year seem unreasonable or even irrelevant. The moment demands a more nuanced approach to gauging progress. That’s where science comes in.
Research suggests that continuous performance management is the answer. We need to be having feedback conversations more frequently, setting shorter-term goals and measuring our progress against our former selves. Not a score sheet. Get ready, because this is what the future for performance management looks like, before your very ears.
I’m Gabriel Berezin and you’re listening to Your Brain At Work from the NeuroLeadership Institute. This week, we continue to draw from a weekly webinar series that NLI has been hosting every Friday, between our Co-Founder and CEO, Dr. David Rock and distinguished guests.
This week, David is joined by NLI’s Head of Performance, Barbara Steele and Senior Client Strategist, Rob Ollander-Krane. Together, they discuss the science of performance management in a VUGA world. Enjoy.
[00:01:25] GB: Hello, and welcome to Your Brain At Work Live. I’m your host, Gabriel Berezin. Thanks for joining today’s session, What To Do With Performance Management Now. Those of you new to Your Brain At Work, this is a pretty common title for us. It’s the name of one of the best-selling books by our CEO and Co-Founder, Dr. David Rock. It’s also the name of our blog and podcast, which is why we call these Friday sessions Your Brain At Work Live, which will also be available mid-next week. This is episode 2 of season 3.
Some quick housekeeping notes. In the Zoom chat, we have a dedicated team that will be responding in real-time. While you’re there, tell us where you’re logging in from, city, state, country, both on Zoom and LinkedIn in the comments section. If you’re on Zoom, comments visible to everyone made possible by choosing all panelists and attendees, so make sure you click that before you post.
Some quick brain-based learning advice as we kick-off today, we suggest turning off any inessential programs running on your computer competing for your attention. This allows you to get the most out of the discussion today and it also helps with the quality of the audio and video of the broadcast.
We suggest grabbing a pen and paper to record those insights coming up. I always got mine here. Those are the most memorable and impactful, those insights when they’re written down. We suggest grabbing a water and a tea and settle in with us for the hour as our guests unpack what the bleep we’re supposed to do with performance management right now. Don’t blame me for that comment, David coined it yesterday.
Let’s get to our wonderful panel today. Our first panelist is the head of NLI’s Performance Practice. She speaks to clients daily and runs a number of weekly sessions, speaking to HR leaders across many industries. She really has a pulse on the brain-based methodology of performance management, Barbara Steele. Hi, Barbara. Welcome.
[00:03:02] BS: Hi, Gabe.
[00:03:04] GB: Thanks for joining us. Our second subject matter expert is a brilliant new addition to NLI’s client strategy team. He’s been in his words, on a one-man mission to obliterate traditional performance management from the face of the earth. Never one to mince words and we’re happy to support him in that goal, Rob Ollander-Krane. Hi, Rob.
[00:03:21] ROK: Hey, Gabe. Happy to be here.
[00:03:23] GB: Good to have you here today. Today’s session will be facilitated by the guy that led the charge on killing performance ratings many years ago, before it was fashionable to do so, our CEO and Co-Founder, Dr. David Rock. Hello, David.
[00:03:36] DR: Thanks, Gabe. Good to be here with you. Rob, so delighted to have you join the team. I know we’ve collaborated on and off when you’re at Gap for the last almost decade or so. Great to have you finally with us. Barbara, thanks for all the work you’re doing.
This should be a great session. I’ll just warn you upfront, you’re going to learn a lot from each other. We wanted to run this session as an opportunity to see what’s really happening out there. I think you’ll find this really helpful to level set what you could do, what you should do, what everyone else is doing and also, anchoring somewhat on the science.
Our vision as an organization is to actually make organizations more human through science. We did not write that this year. We wrote that two years ago. Wow, it’s been a big year for us. Science is actually making a comeback. What a nice thing. People respecting science. Humans are making a comeback. Actually, companies are trying to value the humans. We’ve never been busier. The work we’re doing is based on work we’ve developed for the last 22 years and we’re now advising over 50 of the Fortune 100, which has been really exciting.
Just to start with, as we think about performance management, we have to start with how are the humans. We collected some data, 688 respondents. The cliff note is 49%, which let’s call it half, noticed more, or somewhat more difficulties focus on everyday tasks. That’s similar to data we just saw out of California a couple of weeks ago before the fires, where 44% of people actually, would be classified as having clinical levels of anxiety or depression. That’s again, nearly half. That was pre-fire.
The humans are not doing so well. How we manage their performance in this time really needs to be thought through carefully. That’s what we’re going to do today. What’s the right thing to do during this crazy time? The architecture we’re going to use, we’re going to walk you through six conversations. This is a framework we launched about five years ago now, to just help organizations think about performance management more deliberately.
We realized that it’s any performance cycle is made up of six actual conversations. Each of these conversations have an intention and a frequency and an architecture and a goal. Often, these things are very unstated. Companies have unclear, unstated intentions with each of these conversations. We find it’s really helpful to actually pull these six apart, think about them individually, follow the science of each one individually, because there is a good science for each of these and then design just the right architecture. We do a lot of consulting in that space and thinking about that.
What we want to do today is pull these apart and I’ll hand it to Rob in a moment to kicks off, but we want to pull these apart literally one at a time and share what we think should be happening and hear from you guys what you are doing with each of these as well. It should be a lot of shared learning going on.
Rob, over to you. You want to take us through what’s happening with goal-setting?
[00:06:14] ROK: Thanks, David. A recent poll that NLI did on goal-setting with 225 participants, showed that 65% of organizations are adjusting their goal-setting process. Something’s happening out there in organizations due to the pandemic. It’s changing the way organizations are thinking about goal-setting.
Interesting that only 16% are adjusting their annual reviews. A big difference. There’s some energy around goal-setting that’s happening. There’s another study out there as well that NLI did and they found that 60% of employees have a clear understanding of how they can help support their organizations in this time of crisis. Although that’s the good news, the disappointing news there is that 40% don’t know how to help their organizations. That’s partially what goal-setting is all about is helping employees understand where they are and where they need to go.
In this deeply, disrupted world that we’re in, with everything that’s happening, with these statistics in mind, success can come when you review shorter-term goals more often and focus on what’s really important. I would guess for most organizations, the goals, the annual goals that each of you set as we turn the corner into this new year are no longer relevant. So much has happened. So much has happened in the world that has changed what we need to focus on. Because of the volatility that’s out there, we need to focus on shorter-term goals.
[00:07:39] DR: The cliff note here is much more frequent goal-setting and much shorter term. Maybe being serious about just monthly goals and letting the quarterly ones slide. Maybe be serious about letting the annual slide. There’s all sorts of ways to think about this at the moment. Is there any big trend you’re seeing out there, Rob?
[00:07:54] ROK: I think there’s some confusion about what to do. I think people are thinking to make changes. If I’m putting myself back in the practitioner world, where I was before, in retail in particular, we were dealing with so much change. Every day was a different situation. Just when we thought things were getting better, other things came down the pike to make us have to change our strategy. To ask people to think about longer-term goals was ridiculous. So much easier to just focus on what’s happening right now. I have to believe that’s happening in many companies.
[00:08:23] DR: Because everyone’s so sensitive to VUCA and to the changes. It’s like, one more change could tip the brain over. A lot of firms are also saying, “We’re just going to leave it. Maybe we won’t put as much focus on it.” I can see the sensibility of that. Someone used the phrase, continuous performance management. That is what we’ve been trying to help the market shift to for the last decade. This is a great opportunity to shift a continuous performance management.
I think that’s a great segue, actually, to Barbara’s piece next, because you can’t have continuous anything without lots and lots of high-quality feedback. Let’s talk about that.
[00:08:54] BS: Essentially, isn’t the real question whether or not we should be talking about giving unsolicited, constructive feedback. Because let’s face it, if we’re talking about reinforcing feedback, that doesn’t really cause threat, or elevate threat in folks. It’s when we’re talking about unsolicited feedback. That’s really what we saw for our organization when we conducted research on this.
Conventional wisdom says, you put a lot of the emphasis on the giver providing the feedback. Whereas, really from a science perspective, it’s more about the asking. David, I know that you were directly involved in this study when we led it, so I’m going to invite you to say a few more things about it.
[00:09:35] DR: I’m going to do a very crisp summary of this. I know we’ll have an event coming up in the next few weeks on this. We were asked by some large organizations to basically crack the code on building a feedback culture. What do you do differently to actually make feedback really take off in a company?
What we discovered is that the whole structure around giving feedback creates so much stress for giver and receiver. When you shift to an asking for feedback model, it’s significantly less stressful for both sides. Roughly half as stressful from some bio data we collected. If you’re already at a high baseline of stress, then creating a culture of asking for feedback is going to be much, much better than trying to give. It’s even more relevant now that the culture really emphasizes asking for feedback.
The second thing is when you’re asking, you can get it much more frequently. It’s a really, really important time to be taking on this idea. Do you want to share some of the data that we collected in the last couple of years on this too?
[00:10:28] BS: Yeah, David. Actually, most recently in our latest study, we surveyed roughly 450 individuals and asked them about the frequency of which they were having feedback conversations. You can see this real clear disconnect. This was in pre-pandemic times, of folks feeling as though they weren’t getting nearly as enough feedback as they felt was needed in order for them to perform effectively in their roles. In a deeply disruptive world, like we’re talking about and I also see these comments being made in the chat, which I love, just anchoring more heavily on asking really lowers the threat for both parties and people can get the information that they need.
[00:11:13] DR: I know we did this last year, Barbara. Do you remember the end for some reason we left off? Do you remember that how many people were –
[00:11:18] BS: Yeah. I want to say, David, the end was something 468.
[00:11:24] DR: Something like that. Okay. Definitely north of 400.
[00:11:28] BS: Yeah. North of 400.
[00:11:29] DR: That’s the researchers speaking, I think roughly, 460. That’s great.
[00:11:33] BS: I’ll start tackling some of the questions here. In that 468 number that David is razzing me about, because I should know it exactly.
[00:11:41] DR: No, no. You do know exactly. That’s what –
[00:11:43] BS: We made the choice to actually survey everybody, because we wanted to include in that survey individual contributors. We surveyed all employees to really speak from their vantage point as employees. That’s who’s in that number. It wasn’t strictly managers. It wasn’t strictly talent leaders. Yes, it was absolutely different industries.
[00:12:05] DR: Right. Many industries and it was both employees and managers. It was a large study. Because we specifically, actually asked different questions of employees and different questions of managers to see the difference. I think this study, we’ve got some other data from that study. It was a big study last year.
[00:12:19] BS: Yeah. Who owns the asking? Because as we talk from a science perspective, as David is shared from that actual study, when you anchor on the asking, then it lowers the threat for both parties involved. What asking also does, rather than when you anchor on the giving, it puts more of the responsibility on the manager to be the one driving it.
When you put it on anchoring, it opens it up. It empowers everyone. Really, it gives the opportunity to an individual to ask for feedback, specifically, more broadly and as often as they feel is necessary.
[00:12:59] DR: We published two research papers on this that are really significant. If you’re already a corporate member, you’ll be able to access those and also watch a wonderful session we did with Bob Keegan a few years back, bringing this alive. Couple of years ago, we published a big piece on feedback in strategy and business that goes into feedback and summarizes all our research in this. Essentially, if you can get everyone in the habit, especially managers of asking for feedback, you suddenly get a huge burst in feedback that actually happens.
[00:13:26] BS: What’s your feeling about offering unsolicited, constructive feedback during this time? Is that something we should be doing, giving the crisis times that we’ve been experiencing?
[00:13:38] DR: Interesting data. Lots of people encouraging more frequent feedback. The second study we did was actually collecting real bio data on feedback itself. All right, let’s go on. We’ve got lots more to cover. Let’s talk about check-ins.
[00:13:51] BS: Yeah, definitely. The check-in conversation is our research around from a conventional wisdom standpoint. The check-in has really been more about the work, what the tasks are, what the process is, focusing on how people are doing in terms of the work. Whereas from a science perspective, not to say that the focus on the results and outcomes, it’s not as though that should go away, but expanding the focus and putting far more emphasis on the growth and the learning. That’s what we see from a research and science perspective.
For talent leaders that David, Rob and myself that we speak with on a regular basis, that’s what they’ve been sharing with us, that they have seen more of folks just checking in for the sake of seeing how they’re doing, really dialing into that human aspect, or element. Want to know if that’s been your experience inside of your organizations, or if it’s been something different.
[00:14:50] DR: Relatedness helps mitigate anxiety. There’s actually a whole lot of bio and neuro studies on this. If you’re with a team of people and you’re having to take pain, like putting your hand in ice, you can literally hold your hand in longer if you’re with people and you feel like people have your back. It’s not just a metaphor that you can survive pain better if you’re with a team, or people who care about each other.
Overall, people who felt that they were part of a team had much lower anxiety about that. I think you it’s so important, as many of you are doing, three quarters, to check in on the human in a deeply disrupted world. Really care about people. It’s such a critical thing going forward. I saw a data point from JUST Capital. 89% of Americans think that this is a time for organizations to really pivot, to really change fundamentally, how they think. I think, this putting humans first is such a important movement that’s starting and hopefully, will continue for decades.
[00:15:43] BS: Folks are saying, far more emphasis on the well-being aspect, less about the performance. Someone else meant to be feedback.
[00:15:52] DR: Rob, any other comments you want to add?
[00:15:54] ROK: The thing that I love is that people are doing more of them. I think that’s a good recommendation, regardless of whether we’re in a COVID environment or not at this trend that’s been going on for the last 10 years or so to move toward continuous feedback and talking more often, certainly extends to the check-in. People should be doing them whenever they need, not just because it’s put on a calendar at some point.
[00:16:14] DR: It’s like, because we’re more separated, we need to be more connected and because we’re feeling more distant, we need to be more human and more real with each other, to balance those things out. It’s really important.
I’ll give you three questions. This is what we use at NLI. It’s super easy, super powerful when we have our leadership stand up every week. How are you really? People can’t not answer it. They have to answer it. How are you really? How have you been winning? What do you need help with? That’s it. How are you? Have you been winning? What do you need help with? Now you can’t do that with 20 people, but you can do it in a stand-up with three, five, six, seven, eight people. Super helpful as a format, just three questions for an ongoing check-in. More of a stand-up than a check-in, but still super helpful for a check-in, because you’re focusing on growth and learning and the positive and how you can help as well. Rob, take us through end of cycle. What are your insights and thoughts on this?
[00:17:02] ROK: Our fourth conversation is end of cycle. What we mean by that is reviews that happen anytime during the year. It doesn’t have to be just the year-end, it could be quarterly, it could be even more frequent than that. Whether these are documented or not is irrelevant here. The conventional wisdom says, to focus on outcomes. I bet if you talk to any C-suite, they would say, “Yep, that’s what we want people focused on. Did people achieve their goals or not?”
What science tells us is slightly different. It says that we should, yeah, be focusing on outcomes. That’s certainly important. You also want to focus on what people are learning, what insights they’re finding in the work that they’re doing, either in their successes, or their failures and how they’re applying that insight, both to their future work and maybe to other people’s work in the organization. Think the growth mindset, if you’re familiar with that concept.
It’s a little bit different. It’s a little more holistic, a discussion, not just outcomes. In this incredibly disruptive world that we’re in, you want to lift up from all the problems and the drama that are around us. There’s so much going on. Really focus on the process that the employee is working through and the actions they’re taking to achieve their goals.
I love to think of this as an opportunity to be inspirational too, to talk about the vision of the work, the purpose of the work, and then what did the employee actually do to get there. As we mentioned earlier in the goal-setting discussion, you want to be ruthlessly focused, in this case, on what’s important. Not talking about every single thing that’s out there.
[00:18:29] DR: Let’s take a moment on that. Let’s dig in. Again, think of end of cycle, could be the end of a month where you’ve completed a goal, could be the end of a project, or it could be the end of a quarter, or the end of a year. How do you focus on wrapping things up? When you add key learnings, what happens, versus just focusing on outcomes?
[00:18:47] ROK: I know from my own experience that when someone tells me about what I did in the past, and in particular, if they focus on the things that didn’t go so well, that’s not very inspirational for me. It doesn’t help me to feel good about the work that I did, nor give me guidance on what I should do differently.
When someone instead focuses on well, what did you learn? What worked and what didn’t? How can you apply that to the learning? It gives me the autonomy to make a choice about what I want to do next. I’m engaged. I’m motivated. I’m more inclined to walk away from that conversation feeling like it was productive and helpful to me.
[00:19:21] DR: From a science perspective, what we’re doing is activating a growth mindset. I mean, as soon as you say, tell me what you delivered, you’re activating people, trying to prove their value. They won’t really tell you about what they learned, or how they could get better. They’re going to try and prove that they delivered something. They’re going to try to look good. If you say, “Tell me. Did you deliver on this goal of 25 widgets?” Okay, I’m going to tell you all about how I did that. I want to prove that I performed well. What happens is when you focus on prove, you nudge out improve. They don’t want to tell you anything about how they might get better in the future, because that’s not going to help with proving.
Whereas, when you say, “Hey, how did you do it? Tell me what you learned in this month that helped you get there. What new habits did you build that helped you win? Maybe, what new habits you think you need to build going forward?” Now you’re anchoring people on improve, not on prove. You’re anchoring not on looking good, but on getting better. The prove and look good, versus improve and get better.
As soon as you’re nudging people in any way towards improve and get better, you’re activating more of a growth mindset. We’ve got tons of research on that. Maybe my team can find a couple of the pieces we’ve written on growth mindset in performance management. We’ve probably got a dozen or so.
[00:20:37] BS: David, I was going to mention one Andrea and I did transforming performance with the growth mindset. It’s exactly speaking to what you’re mentioning. For those individuals who operated with a growth mindset, they were far more receptive to receiving the feedback, as well as very much willing to actually learn. When they were given feedback about end of cycle work, when they had a growth mindset, they viewed it as an opportunity, as opposed to thinking of it as in some way that they failed.
[00:21:12] DR: It’s just literally focusing people on getting better, as opposed to proving. It’s really, really important.
[00:21:21] GB: I want to share a story with you and ask a quick favor. A couple years ago, the NeuroLeadership Institute ran a study that asked people to engage in mock negotiations. Each person wore a heart monitor. At the end, people were told to give their partner’s feedback. Only for half the participants, the roles were flipped and people were told to ask their partners for feedback.
The study found something really interesting. It turned out that giving feedback and getting feedback were equally stressful. When people ask for feedback, both partner’s stress levels got cut in half, their heart rate steadied, their anxiety faded. That’s where the favor comes in. Will you give us feedback on our podcast? We created a survey that takes less than two minutes to complete. In return, you’ll receive a free copy of NLI’s latest journal paper, The Fact Model: A Framework for Managing Cognitive Capacity.
To fill out the survey, all you need to do is go to neuroleadership.com/podsurvey. That’s neuroleadership.com/podsurvey.
[00:22:20] DR: We’ve written a lot on this. We’ve written a foundational research paper on organizational growth mindset. We wrote a piece literally on growth mindset as it relates to performance management. We’ve done about three big industry research studies on performance management, separately three or four on growth mindset. If you’re a corporate member, you’ll find just tons and tons of resources; all these papers and videos lots of others in these performance management space. It’s a really big piece of it.
I think, fundamentally shifting to a growth mindset, literally makes people work harder, they learn faster, they’re more adaptive, they handle stress better. There’s lots of good evidence on that. Just that shift really makes a big, big difference.
We are offering a coaching certificate. In fact, we’ve gone a 100% virtual months back. There’s roughly one a month starting that’s incredibly popular. We used to run brain-based coaching years ago, maybe 10 years ago we used to run it fully online and we stopped, but we had all the processes, so we went back to fully virtual and it’s been incredibly popular. There are programs pretty much in every time zone around the world. Roughly once a month, you can start those, so those are available.
[00:23:20] BS: I want to toss one to Rob. Rob, because there’s this question of feedback conversations. Are they compromised at all when we have them virtually?
[00:23:28] ROK: I think that depends on how comfortable you are with this technology and the sterile feeling that you get when you’re only looking at a screen. I think, anyone can learn to have a conversation this way. In fact, I find this to be a slightly more intimate setting. I pay more attention, because I’ve got someone’s face right in front of me. That makes it harder for me to get distracted. I’m like, I’m right there, especially if I turn off all the other technology that’s around me.
I actually think that it can produce better conversations, because it feels much more intimate to me, than coming into someone’s office where there’s other distractions, where other people could come in the room. It’s really just about me in that moment. I’m geeking out on it personally.
[00:24:10] DR: We’re also beaming straight into people’s home office, or home, seeing their families and their dogs and their kids and their pets, all this stuff. It’s a weird time. They’re all just more disconnected, but actually much more intimate in many ways, much more real and connected with people. I think it’s a time you can have much more honest, real conversations, human-to-human.
Just one thing and I like Rob’s comment there. You’ve just got to get used to the tech. Make sure you can see – they can see you clearly, got good lighting, good sound, just get comfortable with whatever platform you’re using, so you’re not using a big chunk of working memory on how do I see people, where does it work. Just try to make more intuitive and automatic the actual tech side of it, so that you can focus on the human-to-human contact.
[00:24:53] BS: Making sure everybody’s on camera. We’re facilitating that human connectedness.
[00:24:58] DR: Yeah. It’s an interesting one. Managing performance virtually. I mean, the big thing here with managing performance virtually is in the absence of social cues, generally in any situation, the absence of social cues makes people assume the worst. If you don’t know someone’s face, are they smiling, are they growling, how are they feeling when someone gives you a message, you literally automatically assume that they’re angry at you. The brain just does that as a default.
Right now, everyone’s craving social cues. The smart manager is going to get on camera with their team member every week and just say hello and wave and say, “How are you? You’re doing great. I’m here for you. Everything’s great.” That’s managing performance 101. Just giving people social cues, encouragement. We need lots of positive feedback. All of that.
It’s not so much managing performance during COVID. It’s nurturing and encouraging and supporting people is the way managers should think about performance right now. Yes, you can hear social cues in people’s voice. You can hear warmth. You can hear authentic caring, especially if you know someone well and you know their voice. You can hear the person’s really caring just in a phone conversation as well.
Right now, I think it’s not just a virtual world, it’s a world where people are anxious and on edge and starving for social cues. In that world, the tip is get on camera regularly, express real empathy and do everything you can to connect human-to-human, even if you want to keep that really separate.
Let’s get to the next one on compensation. Rob, I think you’re taking this?
[00:26:23] ROK: Yeah. This one’s mine. Of all the topics that surround performance management, I think compensation is probably the one that’s either most difficult, or ruffles the most feathers. In the conversations that I’ve had with many companies over the last few years, every time I talk about innovations and performance management, this is the place where there’s the most energy, the most angst, the most questions.
There were a couple questions earlier in the chat about, so what do you do at the end of the year? How do you manage this process of providing compensation, or reward, given everything that’s going on in the world? Conventional wisdom would tell that managers should just basically say, “This is what you’re getting. This is your merit. This is your bonus and you’re done.” Science on the other hand, adds a lot more to this conversation. I certainly in my own experience, that gap and what we designed there and said, this is absolutely the way to go.
You want to help employees understand the process. In fact, help HR understand the process for how merit and bonus are funded and how they’re allocated, because most people don’t know. When you don’t know how it’s done, it feels unfair if you don’t get what you are expecting. You want to include in that conversation more than just the details of the package, but recognize the things that the employee did well, where they’re learning, where they’re growing, what their next opportunities or challenges might be.
Then of course, give them the actual reward. Like we were saying earlier about talking about the future about where you can grow, engage, draw the discussion toward, what happens tomorrow, or the next month, or the next year, so the employee has the motivation to move forward, instead of only looking in the rear-view mirror.
I’ll add one more interesting piece of science on here. There was a Harvard Business Review article that talked about whether employees liked being compared to other employees, in terms of compensation. Think ratings. Did I get the A, or the B, versus the C, compared to what someone else got? Or whether I liked being compared just to my own performance.
Not a surprise. Employees would much prefer to be compared just to their own performance before. Again, think growth mindset here. It’s about me getting better, not about me comparing my performance to someone else.
What changes are going on in your organization right now with regards to year-end rewards? Are no changes being made? Are they exactly the same as before? Are you going to spread reward evenly across all employees, taking the differentiation out? Are you only rewarding top employees maybe because business has been tough and there’s not a lot of money to go around? Are you shifting the focus from individual to team performance? Certainly in this year more than any, it takes a village? Are you making no changes to the annual process?
I’m seeing for the most part, no change is being made, which is interesting, because the world is so different in 2020 than it’s ever been before. I think there are a couple things you can do. David pointed to an article that I wrote. I spent a lot of time talking about what’s going on with rewards and what’s going on in particular in this year, because it’s just not the same thing we’re used to.
One interesting thing that I’m seeing in companies and in particular in the company that I used to work for, the Gap is incredible innovation, which it was surprising to me with all the threats that are out there, you would think that innovation wouldn’t be happening. We saw incredible innovation in our product manufacturing. When the designer and the merchant and the inventory management and production people would come together, there was this magic moment where they were all in a room looking at a sample on a human being, looking how it draped, looking at the colors, pulling the waistline in to make it a little bit different, adjusting the lengths of the sleeves, or the pant leg. It was a human process that was all happening in a room together and then COVID hits. We have to figure out a way to change this process to make it virtual.
Now if you would ask anyone in my company in 2019, could we ever do something like that? Would we ever consider doing anything like that? They would have absolutely said no. They would have said, “You’re crazy. You can’t do that.” Yet in this year, because of what’s happening, all these sacred cows, all these old problems and new problems that are coming up because we’re working remotely had to be solved.
Teams are being incredibly innovative this year, from my perspective. I really think we need to reward that. For those of you who are trying to figure out well, where should we focus our particular bonus to? I think you reward teams. In particular, teams that have been incredibly innovative in this year.
[00:30:44] DR: That’s a good point. The research supports that. Yeah. See, rewarding teams is really important, because it creates team. It creates a commitment to teams as well. It’s really big. Yeah, written on that.
[00:30:54] ROK: I’ll add one more point here, because so many people are working remotely, because we’re not in an office. Working remotely means you’re dealing with the other things that are going on in your environment. That could mean children who are homeschooling and having to figure out the technology and keep them tucked in, or a spouse who’s also working side by side with you, so who can talk quietly so that the other person can get their work done, or do you have to go in separate rooms. We’re managing so many things, not to mention our concerns about the health of everybody in our home. It’s no longer an even playing field. If you’ve got the A to B to C, then you get the pass. If you’re failing, you’re going to be on corrective action anyway, you get to fail.
[00:31:36] BS: One of the things we’re hearing, which is a really important point in this topic around compensation is separating the performance conversation from the rewards conversation. We talk about that from an NLI perspective, our point of view, because when you factor in cognition, so from a brain capacity standpoint, we create cognitive overload for folks when we try to have that year-end discussion, that really encompasses everything. Because we, essentially are giving a review of how the person performed throughout the cycle. We are providing them with feedback, then we’re asking them to lift up and control and think more visionary about what they see their future being inside of the organization. We also talk to them about their pay.
We probably lost them after the feedback, because of threats. Just from a cognition standpoint, it’s too much. That’s why our point of view and some of you are raising this in the chat, is really separate the two. It absolutely helps the experience from a threat level perspective, so that the individual has the ability to manage that threat level and stay with you. Stay with that leader in the conversation and be focused really on just the performance part of the conversation. Then subsequently at a later time, have that rewards discussion.
[00:33:00] DR: Rob, are you seeing any data, or have you recently seen any data on how far apart these should be? I know we saw some data a few years ago. I haven’t seen anything for a couple of years, but how far apart do you think these need to be?
[00:33:09] ROK: I can’t speak to any data, but I’ll say that I think what makes these conversations, so difficult so I think it’s less about the timing, although it is great to separate them. What’s making these conversations so difficult is that many employees go into that year-end conversation not knowing what’s going to happen. It would be beautiful if every employee walked in already knowing about their performance, what they’re doing well, where they’re getting stuck, what they should be working on, had a general sense of whether they were successful. Have they achieved their goals?
They walk into that conversation thinking, “This is probably what I’m going to get, whether it’s a rating, or just the conversation and the compensation that goes along with it.” When you walk into that conversation, it’s not as threatening and you can hear more. What’s happening is they’re not getting that all year-long. I think the conversations that happen before that are important. I can’t speak to their cadence, just that they have to happen in order to make that year-end conversation easier and even shorter.
[00:34:05] DR: Right. The comp should be relatively quick. How far apart? I was hearing a month apart, at least previously. Do we have any sense of how far apart the performance versus –
[00:34:13] BS: Yeah, David. I haven’t seen anything published lately about it, but that’s what we were seeing before roughly a month, no longer than six weeks in terms of the distance between the two.
[00:34:24] ROK: Right. For us at Gap, it depended on where you worked in the organization. If you were in a headquarters location, we said a month, and that made sense for office workers. In our stores, you can’t wait that long to have conversations about performance with people on the sales floor, and you don’t have the luxury of pulling them off the floor for an hour once a month. We tried to create an environment where we were giving this feedback all the time. I think it depends on the work environment.
In this year, where there isn’t parity with people working from home where some people are dealing with parents, with children, with spouses and all of the chaos and all of the fear of potentially getting sick, it’s just not a level playing field. I recommend that the people who are looking at compensation, look at pass-fail, not did I get the A, the B, or the C grade. If you were going to get the A, the B, or the C, then that’s a pass. If you were headed for corrective action, if you were going to get the F or the failing grade, you fail. Then everyone feels good and it takes some of that differentiation between what’s going on in your home life out of the equation.
[00:35:24] DR: That’s the 2%, or 3%, or 4% fail we’re talking about, the serious underperformance. With people, who should be on a performance improvement plan? We’re talking about the few percentage of people that maybe is a fail. Otherwise, this is a year to give people a pass. You have people operating at a 150% capacity, because they’re not traveling. Then you have people at 50% capacity, or 10% capacity, because they’re super struggling.
I think, there’s no way to really work around that, except get the effective people to help the people who are challenged by lack of home care, or whatever, create these internal markets of supporting each other is fantastic. It’s intrinsically rewarding to help people. Otherwise, there’s not much you can do.
[00:36:03] BS: I have one quick thing I want to say before we leave compensation, since we’re talking about separating these conversations when it comes to communicating the reward, can we just send a letter, or just have it show up in their paycheck? What we would say to that is while we’re suggesting clearly to separate the two, based on cognitive capacity like we’ve spoken of, in that the conversation should be a lot shorter, when we reduce it to an e-mail, then it becomes transactional.
We don’t want to lose the human element, because there’s the communication of the reward, but then there’s another piece that’s tied to it around procedural justice. If people really want to understand philosophically something about the pay process, the pay system, you want to allow the space for that to happen and that wouldn’t take place in an e-mail. We would still say, have that conversation, because it needs to happen for that human element.
[00:36:56] DR: Yeah. This is not a time to take out the human. This is the time to take the human in. Absolutely. Speaking of which, let’s think bigger picture, long-term. What have you done to encourage career conversations? Have you not all, quite a bit, somewhat, not sure, where are you on career conversations, the bigger conversations? Then the bigger picture question, will you be continuing to work on succession planning and talent planning this year? I think people don’t want to feel like that is gone. That’s really important. Career, take us away.
[00:37:25] BS: Yeah. Really, the quick and the dirty is we know from a conventional wisdom standpoint, it’s about this once a year event, versus research and science really tells us that this needs to feel more like a partnership, where there’s an opportunity to really provide coaching and guidance to an individual about where they want to go in terms of their professional development and that leader manager being that coach to really help them with that process. It’s conversations taking place.
When you look at the research that we did, pretty similar in terms of the trend that we saw with the feedback, what that 468, those individuals said to us specifically about career conversations, is that they really were practically non-existent. That’s what we saw pre-pandemic. One of the questions we know that when it comes to these disruptive times, individuals will be reflecting on how was I treated by my employer? When we’re in this better normal and the economy is a lot stronger, is this a place I want to stick around and stay with? When you look at career conversations from an employee standpoint, arguably it’s probably the most conversation for them, because it’s about an investment in them and how they’re viewed and they’re feeling valued as part of the organization.
Would love to hear from you all. It looks like, many of you have said that inside of your organizations, you are having these career conversations. We’ll love to hear from you about if they’re not prioritized particularly in these disruptive times, what are the implications? Because we’re thinking, if employees are feeling like, when there’s so much uncertainty in these times and they’re not really sure, given all the change that’s happening inside of an organization, what does this mean for them? What does this mean for their future? They really need to be having these conversations with their leaders.
[00:39:29] DR: That’s great. All right, well let’s bring it together. What we believe is you’re thinking about performance. Firstly, we believe it’s helpful to think about them as conversations. We think these are the six critical conversations. Lots of people carve it up differently. We think this is really helpful. It stood the test of time in our consulting practice for about five years. We’ve helped many, many firms rethink.
What you can do now is individually think about, what’s our philosophy? What does great look like? Let’s build a fantastic one-page guide for each of these. You can really build clear architecture for these, if you divide these into six. What we’ve walked through today is collecting some data on the six, getting a sense of where you.
At our summit coming up in November 10th to 12th, we’re going to report out a lot more on performance. We’ve got a big session. We’ll be sharing out more research and some of the summary data as well, so I encourage you to check into that.
Before we get to the close, performance management executive briefing, we were able to come in and deliver to your leadership team how to think about performance management in this era, a little bit along the side the lines of this. Improve, connect, differentiate and develop are four of our performance management off-the-shelf habit activation solutions.
With improve, you can literally get 5,000, 10,000, a 100,000 a half million people asking for feedback better in 30 days all at the same time. Connect is the neuroscience of quality conversation. Connect is more broadly all the different conversations will be impacted by that. Differentiate is end of cycle and comp and developers career conversations.
Across improved connected friendship develop, each one of these for 30 days, you can actually transform the performance conversation. We also have a very big practice in diversity, equity and inclusion. We had a huge practice in that and that’s super relevant and connected to performance as well. Obviously, we need to take the bias out of all parts of the performance cycle, from goal-setting all the way through to comp and career. We’ve got some strong thoughts on how to make sure that bias is not in this process as well. Click any of those before you jump off.
Big announcement on the summit, the summit has been launched, it’s been announced. It’s our best yet, just like we were saying about more intimate, it’s going to be incredibly intimate, incredibly rich and powerful experience over three days and around the clock, believe it or not, for people in EMEA and APAC to also experience the summit. It’s a three-day idea-a-thon around the world on how to build a better normal. We’ll definitely have a big piece on performance. There’s lots on diversity, equity, inclusion and how to really think about that, lots on just change. It’s going to be our best summit yet. Fully virtual. It’s normally about $3,000 to attend. This year, it’s under $500. You can obviously be at any part of that. I encourage you to check that out and there’s information there.
Just finally, a big thank you to Rob for your hard work behind the scenes and joining the team and Barbara, your incredible steerage of this practice and pulling this together, both of you the last few weeks. Thanks for joining us, Rob. Welcome to the team. Everyone out there, the cliff note, care about the humans, follow the science.
[00:42:56] BS: They’re here.
[00:42:56] DR: That’s what it is I think on performance. Thanks very much everyone. Take care of yourselves. Look after each other. Keep delivering what matters. We’ll see you next week.
[00:43:02] GB: Thanks, David. Thanks, Rob and Barbara for a wonderful session today and the team in the background that makes this all seamless. Thanks to all of you for attending. I hope you get as much out of this as we do. We love hearing from you. The conversation always so lively.
We’d also love your feedback. If you’d be willing, we’d love to hear what you thought. Just wanted to share a couple virtual events coming up to share with you. We do product demos every Thursday. Next week, we’ll be reviewing the habits and behaviors necessary to mitigate bias and performance evaluations to ensure they’re accurate and fair, as we were talking about today. End of year coming up. This is a pretty big priority. We’ll be walking you through the product differentiate.
If you can’t get enough of your Brain At Work Live, we’ll be back the same day of the week, next Friday. Fridays at noon. We’ll be sharing the right and wrong ways to engage leaders around DNI. You can listen to those on-demand by subscribing to our podcast, Your Brain At Work. There are two seasons, worth 25 episodes total for you to dig into. You can find those available on the platform of your choice; Apple, Google, Spotify, whatever you like. Lots to dig into there. Season 3 is 2 episodes in as of today.
Have a great rest of your day and hopefully, we’ll see you next week. Bye, everybody.
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[00:44:11] GB: Your Brain At Work is produced by the NeuroLeadership Institute. You can help us in making organizations more human by rating, reviewing and subscribing wherever you get your podcasts. Our producer is Danielle Kirshenblat and Cliff David is our production manager. Original music is by Grant Zubritsky and logo design is by Ketch Wehr. We’ll see you next time.